Enterprise in capital constrained markets presents a number of risks and challenges including lack of access to formal finance to sustain businesses and insurance to protect against losses. This is because low-income business owners do not have the funds to participate in the formal capital markets or insurance sectors or if they do, they are classified as high risk and are penalized with higher interest rates. Starting in the late 1960s, microfinance as a service has become a viable alternative for low-income business owners to protect themselves against shocks while operating their businesses. Microinsurance has also become an invaluable tool to help the poor who disproportionally face greater risks from perils like sudden death of a family member, poor health and environmental dangers like fires and floods to mitigate risks as they operate their businesses.
The growth of microinsurance as an industry has created opportunities for well-funded and established actuarial and consulting firms like Milliman for involvement. The MicroInsurance Centre at Milliman which was acquired by world renowned actuarial firm in October 2017 serves as a bridge between regulated insurers and intermediaries helping to provide microinsurance products to assist low income business owners. The work of this organization pertains to product development, research, advocacy and projects centered on servicing low income people around the world. Since its inception over twenty years ago, the MicroInsurance Centre has carried out microinsurance projects in over seventy countries. The Centre’s mission statement is to “Create simple, understood, accessible, valuable, efficient (SUAVE) microinsurance products with value for clients, which represent a business case for the insurer and distribution channel.”
This capstone project is a full stack development tool to educate the public about inclusive financial services like microfinance and microinsurance.
The project was inspired by published research the primary investigator conducted with female entrepreneurs in Ghana as an undergraduate student at the
University of Pittsburgh and conversations about microinsurance the researcher engaged in while working as an intern at Milliman during graduate studies at the University of Chicago.